THE line marking the spread of Melbourne’s million dollar suburbs has moved east and north in 2015.
Fifteen suburbs stretching from Templestowe to Hampton East and including the hotspots of Box Hill and Glen Waverley are among 25 suburbs where the median value has passed $1 million in the past year, new figures from property analysts CoreLogic RP Data show.
Demand for inner city living has pushed six suburbs just north of the city into million dollar territory.
Mt Waverley has had the strongest growth, with the median value rising nearly $300,000 to $1.16 million in the 12 months to August 2015.
The trend confirms observations during spring that a ripple effect is driving values as buyers seek to escape rising prices closer to the city, but also points to investors and developers speculating on Asian demand.
Harcourts Judd White director Dexter Prack said there was a buying “frenzy” between January and June around Glen Waverley, where the median value increased to just over $1 million, while vendors expectations took off.
“I’ve never seen a market like it where every auction had five or six bidders, big crowds and astronomical reserves where we as agents were getting it wrong,” Mr Prack said.
“We were listing properties at $1.6 million to $1.7 million and they were selling at $2.2 million to $2.3 million.”
Mr Prack said the school zones remained the strongest attraction to the area, but speculation on apartment rezoning and luxury homes tailored for the Asian market were also driving values.
While the strongest price growth was concentrated around central Mt Waverley and Glen Waverley, it set off a ripple effect throughout surrounding suburbs, including Burwood, he said.
Mr Prack said once the $2.5 million to $3 million price barrier was broken for a brand new home in Glen Waverley, developers and investors began to push the price of older homes on substantial blocks.
But vendors still looking to take on the market had missed the boat, he said.
“Vendor expectations increased exponentially with the market. When the market increased, vendor expectations increased, which is why we’ve got a lot of pass-ins,” he said.
Mr Prack said the market had tapered off in spring as more properties hit the market, giving buyers more choice and the ability to be cautious at auctions. Some properties were passing in without a genuine bid, only for buyers to make later offers, he said.
The most expensive entrant to the million dollar club is Fitzroy, where CoreLogic RP Data estimates the value at $1.161 million. Fitzroy leads a clutch of inner north suburbs to climb into seven digits, including Carlton, Clifton Hill and Brunswick East, where buyers are seeking inner city experiences like trams, cafes, restaurants, cultural activities and proximity to the city.
Nelson Alexander sales director Arch Staver said the inner north had been knocking on the million-dollar door for several years but the spread into Brunswick East had come earlier than expected.
“Brunswick East arrived in a pretty spectacular fashion more recently as a $1 million suburb,” Mr Staver said. “Once upon a time, where a buyer would focus on Fitzroy or Carlton North, there’s a willingness to move across to Brunswick East.”
Buyers were looking further afield for affordability.
“People are being pushed out because what they are buying in Brunswick East would cost then an extra $200,000 in Fitzroy,” he said. “It’s the pursuit of value and ironically, the pursuit of value creates higher prices and erodes value.”
Other new entrants include Prahran, Essendon and Williamstown.
CORELOGIC RP DATA PROVIDES AUTOMATED PROPERTY VALUATIONS TO THE BANKING AND INSURANCE INDUSTRY, COMBINING SALE PRICES WITH A RANGE OF DATA INCLUDING NUMBER OF BEDROOMS AND LAND SIZE. MEDIAN VALUES ARE BASED ON THE MIDDLE VALUE OF EACH SUBURB